FI Morning Grain Comments 06/29/21

PDF attached

 

Good
morning.

 

Soybeans,
meal, corn and Chicago wheat area lower while SBO is higher on renewed ideas the US will grant less small refinery waivers. Strong trade in Minneapolis wheat (highest since 2013 on a monthly rolling chart).  US weather outlook for the Great Plains and Midwest
appears to be unchanged from yesterday. Midwest will see rains across the north central and west central areas today before moving into the central and southwest Wednesday and southern and eastern areas Thursday.  50 soybean oil registrations were cancelled
out of Volga, SD, lowering the total for all SBO registrations to 668.  Palm oil traded lower early overnight but rebounded to settle 47MYR higher on strength in CBOT soybean oil.  Cash palm was up $17.50/ton.  China futures were down 1.6% for soybeans, up
1.4% for meal and up 0.3-1.8% for vegetable oils.  Look for additional spreading ahead of First Notice Day deliveries. 

 

 

 

 

 

 

 

StatsCan
vs. trade, prior and last year

 

 

 

Weather

 

1-7
DAY

 

 

WORLD
WEATHER INC.

WORLD
WEATHER HIGHLIGHTS FOR JUNE 29, 2021

• Frost
  and freezes occurred this morning in southern Brazil impacting wheat and Safrinha corn areas.
  
• Another
  night or two of similar conditions will occur with some of the cold getting into coffee, citrus and sugarcane areas as well.
  
• In
  the meantime, hot and dry conditions will continue in the northwestern United States, Canada’s Prairies and a part of the northwestern U.S. Plains.
  
• The
  lower U.S. Midwest will be wettest over the coming week and additional rainfall is expected in the southern Plains including some cotton areas.
  
• The
  tropical disturbance in the Tropical Atlantic Ocean is better organized today and has more potential to become a tropical cyclone this week.
•  The
  long term outlook for the disturbance is for it to move into the Caribbean Sea Friday and ultimately to the central U.S. Gulf of Mexico Coast during the middle part of next week.
  
• Not
  much other change was noted in the world’s weather today. 

Source:
World Weather, Inc.

 

 

Bloomberg
Ag Calendar

Tuesday,
June 29:

• Canada
  Statcan data on seeded area for wheat, durum, canola, barley and soybeans
• South
  Africa updates corn production

Wednesday,
June 30:

• EIA
  weekly U.S. ethanol inventories, production
• U.S.
  acreage data for corn, wheat, soybeans and cotton; quarterly grain stockpiles
• Bloomberg
  New Economy Catalyst; climate and agriculture
• Malaysia
  June 1-30 palm oil export data
• U.S.
  agricultural prices paid, received

Thursday,
July 1:

• USDA
  weekly crop net-export sales for corn, soybeans, wheat, cotton, pork, beef, 8:30am
• World
  cotton outlook update from International Cotton Advisory Committee
• Costa
  Rica, Honduras monthly coffee exports
• U.S.
  corn for ethanol, DDGS production, 3pm
• USDA
  soybean crush, 3pm
• Port
  of Rouen data on French grain exports
• Australia
  Commodity Index
• AB
  Sugar trading update
• HOLIDAY:
  Canada, Hong Kong

Friday,
July 2:

• ICE
  Futures Europe weekly commitments of traders report (6:30pm London)
• CFTC
  commitments of traders weekly report on positions for various U.S. futures and options, 3:30pm
• FranceAgriMer
  weekly update on crop conditions
• Source:
  Bloomberg and FI

Source:
Bloomberg and FI

 

 

 

 

 

USDA
inspections versus Reuters trade range                                                    

Wheat                 
285,654                 versus   400000-600000  range

Corn                     
1,008,351             versus   1200000-1700000             range

Soybeans           
103,965                 versus   100000-300000  range

 

Macros

 

Corn

• US
  corn turned
  higher this morning in part to a 1 point drop in US corn conditions, Brazil weather concerns, and expectations for light deliveries, if any, on Wednesday (released tonight). 
  
• Look
  for additional spreading ahead of First Notice Day deliveries. 
• Keep
  an eye on Brazil second corn crop frost/freeze conditions. They may occur again tonight.  From World Weather Inc. 
  

• DTN
  recap “The latest GFS model shows 14-55% of normal precipitation in South Dakota, North Dakota and Minnesota the next seven days while Iowa is slightly better at 77% but not much of that moisture will be in the driest part of the state. The European model
  is drier for all Western Corn Belt states with Iowa staring at 46% of normal precipitation and Nebraska at 51%. “
  
• South
  Africa’s CEC: corn production for 2021 at 16.233, up from 16.180 in May and up from 15.300 year ago.  8.937 million tons of white and 7.296 million tons of yellow. 
  
• China
  plans to auction off 155,000 tons of imported corn on July 2.
• 123,977
  tons of US
• 31,539
  tons of Ukraine origin
• Live
  hog prices in China have rebounded significantly, up 31 percent from Friday, in part to China buying domestic product for reserves.  Poor crush margins may have also led to a slowdown in heard expansion. 
  
• U
  of I: Lower Pig Crop and Farrowing Intentions Support Higher Prices
• https://farmdocdaily.illinois.edu/2021/06/lower-pig-crop-and-farrowing-intentions-support-higher-prices.html?utm_source=rss&utm_medium=rss&utm_campaign=lower-pig-crop-and-farrowing-intentions-support-higher-prices
  
• US
  corn conditions fell 1 point to 64 percent G/E.  Traders were looking for a one point increase in crop conditions.  We left out corn yield unchanged.  7-year average is 70. 
  
• USDA
  US corn export inspections as of June 24, 2021 were 1,008,351 tons, below a range of trade expectations, below 1,775,716 tons previous week and compares to 1,241,038 tons year ago. Major countries included
  China for 335,052 tons, Japan for 273,983 tons, and Mexico for 228,791 tons.
  
• Brazil
  will see freezing temperatures starting around June 30, creating problems for the second corn crop in northern Parana, western and southern Sao Paulo and central and southern Mato Grosso do Sul.
  

 

Export
developments.

• None
  reported

 

 

Soybeans

• Soybeans
  were lower this morning but much of the losses were paired prior to the StatsCan report.  Soybean oil is up sharply on expectations for the EPA to grant less small refinery waivers but that is speculation at this point.  We need to find out what will be proposed
  before making assumptions. 
• US
  soybean conditions were unchanged at 60 percent vs. 64 average.  Traders were looking for a one point increase in crop conditions.  We slightly lowered our US soybean yield. 
  
• USDA
  US soybean export inspections as of June 24, 2021 were 103,965 tons, barely within a range of trade expectations, below 205,155 tons previous week and compares to 334,642 tons year ago. Major countries included Mexico for 49,597 tons, Indonesia for 18,925
  tons, and Vietnam for 6,415 tons.
• Palm
  oil traded lower early overnight but rebounded to settle 47MYR higher on strength in CBOT soybean oil.  Cash palm was up $17.50/ton. 
  
• China
  futures were down 1.6% for soybeans, up 1.4% for meal and up 0.3-1.8% for vegetable oils. 
  
• Offshore
  values are leading SBO 128 points lower and meal $2.00/short ton lower. 
• Rotterdam
  rapeseed and soybean oil prices were 25-45 euros higher, and meal mixed. 
• China:
  

• Malaysian
  palm oil:  

• We
  look for little or zero initial First Notice Day deliveries for the soybean complex (SBO zero to 150, meal 0-25, soybeans zero).  We are hearing soybean meal could zero for FND, but some circulate during the period.  Soybean meal basis is weak despite the
  recent increase in export interest.  Corn no deliveries expected and Chicago wheat 0-50.  MN wheat zero and KC 0-150. 
  

 

Export
Developments

• None
  reported

 

 

Wheat

• Multi
  year highs in Minneapolis wheat is lending support to KC wheat and limiting losses in Chicago.  Spring wheat ratings were down a more than expected 7 points from the previous week to 20% G/E, prompting us to further lower July initial spring and durum production
  prospects.  Bloomberg noted spring wheat is up 12 percent in eight days and canola up 17%. 
  
• Record
  breaking heat will start to ease across the PNW by midweek. 
• IKAR
  increased their Russian wheat forecast from 82 to 83.6 million tons, down from 85.9MMT in 2020. 
  
• Agritel
  sees Ukraine wheat production at record 30.5 million tons, up from 25.3 million last year. 
  
• US
  winter wheat conditions were down 1 point.  Traders were looking for a one point increase in winter wheat crop conditions.  See attached FI production estimates.  Adjusting to our state by state crop progress, we actually raised winter production by s a slight
  amount and lowered spring wheat.  These estimates are what we think USDA will report next month. 
  
• US
  winter wheat harvest progress was estimated at 33 percent, up from 17 percent last week and 3 points above a trade guess.  . 
  
• USDA
  US all-wheat export inspections as of June 24, 2021 were 285,654 tons, below a range of trade expectations, below 551,490 tons previous week and compares to 515,359 tons year ago. Major countries included Mexico for 68,103 tons, Korea Rep for 55,000 tons,
  and Nigeria for 27,500 tons.
• September
  Paris wheat was up 0.25 euro at 203.25/ton.

 

Export
Developments. 

• Tunisia
  seeks 100,000 tons of soft wheat and 100,000 tons of barley on Wednesday, optional origin. 
  
• Thailand
  seeks up to 197,700 tons of feed wheat on Wednesday, in five consignments, for shipment between Aug and Dec. 
  
• Jordan
  retendered for 120,000 tons of feed barley set to close July 7 for Nov/Dec 2021 shipment. 
  
• Jordan
  retendered for 120,000 tons of wheat set to close July 6 for Jan/Feb 2022 shipment. 
  
• Ethiopia
  seeks 400,000 tons of wheat on July 19. 

 

Rice/Other

• Bangladesh
  seeks 50,000 tons of rice from India.